{"id":122710,"date":"2021-10-11T13:41:37","date_gmt":"2021-10-11T13:41:37","guid":{"rendered":"https:\/\/fin2me.com\/?p=122710"},"modified":"2021-10-11T13:41:37","modified_gmt":"2021-10-11T13:41:37","slug":"frances-carrefour-and-auchan-end-talks-over-19-4-billion-tie-up","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/frances-carrefour-and-auchan-end-talks-over-19-4-billion-tie-up\/","title":{"rendered":"France's Carrefour and Auchan end talks over $19.4 billion tie-up"},"content":{"rendered":"
PARIS (Reuters) -Carrefour and Auchan have ended talks over a possible partnership, the second time this year Carrefour boss Alexandre Bompard\u2019s plans to create a Gallic supermarket powerhouse have been frustrated.<\/p> The potential deal to create a retailer with combined sales of 110 billion euros per year and a French market share of nearly 30%, had looked too complex in terms of valuation and structure, a source close to the matter told Reuters.<\/p>\n A second source familiar with the talks said Auchan had offered Carrefour 21.50 euros per share, or 16.8 billion euros ($19.4 billion), comprised of 70% in cash and 30% in shares of the combined company.<\/p>\n That\u2019s more than 30% above Carrefour\u2019s share price last week. But Carrefour ended the talks after its top shareholder, the Moulin family, opposed the deal – mainly on valuation grounds, the source added.<\/p>\n A person close to the Moulin family, however, told Reuters the family had opposed the tie-up because it \u201clacked industrial rationale\u201d and could raise competition issues as well as threaten jobs in France.<\/p>\n In January, Canada\u2019s Alimentation Couche-Tard dropped a 16.2 billion euro bid for Carrefour after the French government opposed the deal, citing food security concerns.<\/p>\n This left Carrefour without the extra firepower to galvanise a turnaround plan Chairman and CEO Bompard was reappointed in May to lead for another three years.<\/p>\n The extra resources offered by Couche-Tard would have boosted Carrefour\u2019s e-commerce roll-out, a priority as it looks to retain an edge over Amazon on the groceries front.<\/p>\n The discussions with Auchan, which started in the spring, reviewed various scenarios ranging from equity tie-ups to asset swaps and technological partnerships, the first source said.<\/p>\n It was unclear if there was potential for talks to be revived. The second source said Auchan, owned by the Mulliez family, did not plan to make a hostile move for Carrefour.<\/p>\n Analysts have expressed concern that an Auchan-Carrefour merger would increase exposure to the struggling hypermarket store format. Some, however, have said a deal could generate cost savings and buying synergies.<\/p>\n Bompard has repeatedly said the retail sector is bound to consolidate and his mission is to ensure Carrefour emerges as a winner.<\/p>\n In 2018, Carrefour and French rival Casino were locked in a dispute after Casino said it had rejected a tie-up approach that Carrefour denied making.<\/p>\n Carrefour said in June it had also started considering possible tie-ups and divestments for its foreign subsidiaries, but that it had not made a decision to sell any assets.<\/p>\n Carrefour shares were 1.4% lower at 15.8 euros as of 1110 GMT.<\/p>\n \u201cWe think there is potential for further offers from Auchan or at least strategic assets disposals,\u201d Bernstein analysts said in a note.<\/p>\n ($1 = 0.8648 euros)<\/p>\nCONSOLIDATION<\/h2>\n